News / Economy

EU, China Stumble Toward Solar Trade War

FILE - Employees examine newly-made solar panels before boxing for shipment at a factory of Yingli Solar in Baoding, Hebei province, August 2, 2012.
FILE - Employees examine newly-made solar panels before boxing for shipment at a factory of Yingli Solar in Baoding, Hebei province, August 2, 2012.
Reuters
— China's leadership transition is complicating talks to resolve a multi-billion-dollar dispute with the European Union over solar panels, pushing both sides closer to placing punitive tariffs on each others' exports and risking a trade war.

The newly-appointed chief of China's Communist Party Xi Jinping is set to take over the presidency at a national congress in March. But the full line-up of government officials is not yet in place and China's current commerce minister is likely to step down after what some have said was a political snub at the party's congress in November.

EU leaders want to avoid following the United States' decision last year to impose duties on Chinese solar power products, aware that Europe needs China to help it emerge from three years of economic crisis.

But EU officials and diplomats say they have made little progress, accusing the Chinese of "stonewalling," and are unable to get beyond the outgoing commerce minister, Chen Deming. They complain of a limbo in the ministry that will not end until after the March congress.

"There is no clarity on what the new leadership thinks about trade," said a senior EU official involved in talks with China. "They are stonewalling and the window of opportunity for a solution on solar panels is closing."

China's commerce ministry spokesman Shen Danyang told reporters in Beijing this week that officials are "conducting consultations and relevant response work with the concerned parties," but did not comment on any impact China's leadership transition is having on negotiations.

Germany, the United States and China are the world's biggest solar markets and companies are in a race to win contracts as countries seek to limit pollution and global warming.

In a non-binding vote, EU countries approved on Wednesday a request from industry to register solar panels from China, which would allow for retroactive measures if the European Commission agrees to registration and does impose duties.

But the Commission, the EU executive, denied on Thursday that the decision by member states signalled Brussels was closer to blocking Chinese solar products. "Let's not interpret this as suggesting anything - it is simply administrative procedure," EU trade spokesman John Clancy said in a statement.

Race Against Time

European solar panel manufacturers, led by Germany's Solar World, accuse their Chinese counterparts of receiving state subsidies to flood the EU with panels sold below cost and putting Europeans out of business to corner the market.

The Commission launched an investigation last September into Chinese solar panels, the biggest import sector it has ever targeted. China exported more than $25 billion worth of panels to the European Union in 2011.

Highlighting the risk of a trade war, Chinese solar companies also accuse the European Union of wrongdoing.

China says Europe illegally favors it domestic solar panel producers and Beijing is considering its own duties on EU exports of polysilicon, which is used to make solar panels.

FILE - Employees carry solar panels at a solar power plant in Aksu, Xinjiang Uyghur Autonomous Region, May 18, 2012.FILE - Employees carry solar panels at a solar power plant in Aksu, Xinjiang Uyghur Autonomous Region, May 18, 2012.
x
FILE - Employees carry solar panels at a solar power plant in Aksu, Xinjiang Uyghur Autonomous Region, May 18, 2012.
FILE - Employees carry solar panels at a solar power plant in Aksu, Xinjiang Uyghur Autonomous Region, May 18, 2012.
Complicating things further, some European distributors and installers of Chinese panels say EU tariffs on China would be damaging for Europe's efforts to develop clean energy. They say solar energy is only efficient using Chinese products that are up to 45 percent cheaper than those made in Europe.

"Even without the [leadership] transition, this is a very difficult issue,'' said Scott Kennedy, director of the Research Center for Chinese Politics and Business at Indiana University. "I really don't see a negotiated outcome."

Time is of the essence because many expect Beijing to make a decision on polysilicon duties as soon as the end of February.

The EU's investigation must culminate in a decision by June.

In reality, that is likely to come by mid-April, when diplomats from the EU's 27 countries make their recommendation to the European Commission, which is handling the case.

Such a timeframe does not give a new trade minister in Beijing much time to get acquainted with the issues and reach a settlement. EU Trade Commissioner Karel De Gucht said there is no chance of tweaking the investigation's deadline.

"They know exactly what it is about, the solar panel case. We are consulting them, it is up to them," De Gucht told Reuters. "You cannot have something like a prolongation of that period because there is a transition in China."

In the past four years, the Commission has only chosen to end one trade defense case in China without imposing duties.

You May Like

At Khmer Rouge Court, Long-Awaited Verdict Approaches

First phase of trial, which is coming to an end, has focused on forced exodus of Phnom Penh in 1975 - and now many are hopeful justice will be served More

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities More

Video Information War Rages Alongside Real One in Ukraine

Downing of Malaysian airliner, allegations of cross-border shelling move information war in war-torn country to a new level More

This forum has been closed.
Comment Sorting
Comments
     
by: Ian from: USA
February 22, 2013 5:48 PM
"Complicating things further, some European distributors and installers of Chinese panels say EU tariffs on China would be damaging for Europe's efforts to develop clean energy. They say solar energy is only efficient using Chinese products that are up to 45 percent cheaper than those made in Europe."
it is the same excuse Walmart used . You save 45% but the hidden cost of european workers losing jobs may be higher than 45% !


by: JKF from: Ottawa, Canada
February 21, 2013 11:20 PM
Tarrifs/duties are the only way to deal with producers, that do not work from a level playing field; and more importantly to protect home producers from an unfair business practice(s). But the money collected must go to the producers, as compensation...will it?

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Information War Rages Alongside Real One in Ukrainei
X
Al Pessin
July 31, 2014 8:13 PM
The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.